Is Privatized Health Care Driving the U.S. Budget Deficit?

Tuesday, November 05, 2013

Critics of privatized health care in the United States argue that the U.S. government wouldn’t be mired in annual budget deficits if the American medical system underwent serious reform.


“The federal government doesn’t have a deficit problem. Its fiscal issues are entirely related to the bloated cost of American health care,” Joshua Holland wrote at “If we paid the same amount for health care per person as people do in other wealthy countries with longer average life expectancies, we’d have a balanced budget now and surpluses projected for the future.”


Holland points to research conducted by the Center for Economic and Policy Research (CEPR) which shows the U.S. has “possibly the most inefficient” health care in the world, due to the fact that Americans spend twice as much per person on health care as other advanced countries—while having “worse health outcomes, including a lower life expectancy.”


CEPR says if the U.S. can get health care costs under control, its “budget deficits will not rise uncontrollably in the future. But if we fail to contain health care costs, then it will be almost impossible to prevent exploding future budget deficits.”


Some key facts/points cited by Holland:



  • The U.S. government doesn’t exercise the kinds of cost controls that other countries do. As an example, the U.S. paid an average of $947 per person for prescription drugs in 2009, nearly double the $487 per person paid in the OECD as a whole. Yet “we don’t take twice as many pills,” said Holland. “We just let big pharma charge whatever it can get away with.”


  • Multiple studies reveal that Americans have significantly poorer health outcomes than most developed countries.


  • The U.S. relies more on the private sector for health care delivery than any other wealthy country. In OECD countries, governments cover 72% of health care costs, while the U.S. government pays for less than half (48%). This has resulted in Americans paying more for new medical technologies and pharmaceuticals than citizens in other developed nations. In fact, new medical technologies are the primary source of U.S. health care costs, according to a 2011 study by the Robert Woods Foundation.

-Noel Brinkerhoff


To Learn More:

Rip-Off: How Private-Sector Health Costs Are Killing the American Dream (by Joshua Holland,

Health Care Budget Deficit Calculator, Version 1 (Center for Economic and Policy Research)

Private Insurance Companies Cost Medicare $34 Billion This Year (by David Wallechinsky, AllGov)


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